The Sturgeon Refinery, a $6.5 billion project originally approved by the PCs and built through a partnership between North West Upgrading, SNRL and the Alberta government, is a boondoggle that’s only getting worse since the last time I reported on it.
It’s spiralling out of control with the cost of construction alone increasing by $3 billion, leaving Alberta taxpayers on the hook for $26 billion in toll fees over 30 years that will go to North West to upgrade bitumen to diesel, in addition to a 5 per cent profit.
These companies will have their construction costs covered by us and then some, so the most risk for the project is assumed by taxpayers.
And now we hear it won’t open until June of 2018, which is nine months behind schedule meaning nine months of interest payments on borrowed money borne by Alberta taxpayers.
Several upgrader projects were slated before the economic downturn in 2008 that wreaked havoc on the Alberta economy. When Ed Stelmach brought in the royalty review, that didn’t help since a lot of projects were abandoned and never picked back up.
Of the eight projects slated at that time, only one remained because companies like Petro Canada and Statoil quickly realized that when times got tough, capital costs and market differentials would just be too much.
The only one left standing was the Sturgeon Refinery. Injecting taxpayer money into it was the only thing that could give this project a pulse and bring it to life.
The NDP are repeating the same mistakes that should have already been learned, even bringing in yet another royalty review that created uncertainty.
It’s like deja vu but there are real risks involved that will cost our grandchildren’s grandchildren. The Alberta NDP could have put a stop to this project, but they didn’t.
They want more oil refined in Alberta but they won’t tell you about the price tag that comes along with it.